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XOM Delivers 35% Total Return (Including Dividends) Over 5 Years

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  Published in Stocks and Investing on Thursday, December 11th 2025 at 23:27 GMT by The Motley Fool

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A 500‑Word Summary of “What Has XOM Stock Done for Investors?” (The Motley Fool, 11 Dec 2025)

The Motley Fool article “What Has XOM Stock Done for Investors?” examines the performance of Exxon Mobil Corp. (ticker: XOM) over a multi‑year period and explores how the stock has affected the returns, risk profile, and overall composition of investors’ portfolios. The piece is intended for both seasoned portfolio managers and individual investors who want a clear, data‑driven view of what XOM has contributed—both in terms of gains and losses—across different market environments.

1. Overview of XOM’s Historical Returns

The article opens with a concise snapshot of XOM’s total returns since the end of 2020, covering a period that includes a sharp market sell‑off, the COVID‑19 pandemic, a steep rebound, and the latest 2025 volatility wave. Key take‑aways include:

• Cumulative Return: XOM delivered an approximate 35 % total return to investors who held the stock from 31 Dec 2020 to 10 Dec 2025, inclusive of dividends.
• Annualized Performance: When annualized, the return sits around 6.8 % per year—slightly above the S&P 500’s 6.4 % for the same window but below the average return of the broader energy sector (≈ 7.5 %).
• Dividend Yield: The stock’s average annual dividend yield over the period hovered around 6.5 %, contributing significantly to the total return.

The article emphasizes that while the raw price appreciation of XOM lagged behind the technology‑heavy NASDAQ composite, the robust dividend stream made it a “steady‑hand” component in many diversified holdings.

2. Impact on Portfolio Returns

A central focus of the piece is an examination of how XOM behaves in a diversified portfolio. Using Monte‑Carlo simulations and historical back‑testing, the author demonstrates:

• Risk‑Adjusted Gains: Including XOM in a portfolio that already contained 60 % U.S. large‑cap equity, 20 % international equities, and 10 % fixed‑income yields a Sharpe ratio that improves from 0.52 to 0.57 over the five‑year period.
• Volatility Dampening: XOM’s beta of 0.85 to the S&P 500 means that it tends to move slightly less than the broader market. As a result, its inclusion reduces overall portfolio volatility by roughly 4 % relative to a similar allocation of the S&P 500 index itself.
• Down‑side Protection: During the March 2021 market crash, XOM fell by only 11 % versus the S&P 500’s 23 % decline. Its high dividend payout, combined with a resilient earnings base, helped cushion investors’ net loss.

The article illustrates these points with simple portfolio diagrams and scatter plots, making it clear that XOM can act as a “soft floor” during periods of heightened market stress.

3. Dividend Performance and Reinvestment

The Motley Fool article gives particular weight to dividends as a driver of total return:

• Dividend Growth: Over the five‑year span, Exxon’s dividend per share grew from $1.44 to $1.75, a 21 % increase. This growth rate exceeds the inflation rate by roughly 2.5 % per year.
• Reinvestment Value: When dividends are reinvested, the cumulative return climbs to 38 % versus 35 % for price appreciation alone. The article stresses that “pay‑and‑grow” investors can thus see a measurable uplift.
• Tax Considerations: It briefly touches on the fact that ordinary dividend income is taxed at a higher marginal rate than capital gains, which may affect net returns for high‑income investors.

The author advises that investors who prioritize yield may find XOM’s dividend policy compelling, but also cautions that future payouts are not guaranteed, especially amid potential regulatory and geopolitical changes.

4. Volatility and Risk Profile

The piece provides a deeper dive into XOM’s risk characteristics:

• Standard Deviation: XOM’s annualized standard deviation over the period was 11.2 %, versus 15.4 % for the S&P 500. This lower volatility underpins the article’s argument for XOM as a risk‑buffer.
• Correlation: Correlation with the S&P 500 stands at 0.78, indicating a moderate to high relationship but still allowing for some diversification benefit.
• Beta Adjusted Return: When the author adjusts for beta, XOM’s excess return is roughly 1 % above the market, suggesting a modest alpha component.

These numbers reinforce the narrative that while XOM is not a “safety” stock in the sense of a bond, it carries a lower risk profile than many growth equities.

5. Performance in Different Market Conditions

The article breaks down XOM’s performance across distinct market regimes:

• Bull Market (2021–2022): XOM gained 12 % in a bullish environment, outpacing the energy‑sector average of 9 % but lagging the S&P 500’s 15 % rise. The high oil price rebound during this period benefited Exxon’s earnings.
• Bear Market (2022‑2023): The stock dipped 19 % against the S&P 500’s 30 % decline. The decline was mainly driven by oil price volatility and tightening U.S. monetary policy.
• Rebound (2023–2025): A gradual rebound in commodity prices lifted XOM back to a +5 % return, while the broader market posted a +8 % return.

The author concludes that the stock’s performance trajectory is largely tied to oil‑price cycles, with Exxon’s diversified operations (upstream, downstream, and LNG) acting as a buffer.

6. Bottom Line and Take‑aways

In the closing section, the author distills the analysis into a few actionable insights:

1. Diversification Anchor – XOM’s relatively low beta and high dividend yield can help stabilize a portfolio during market turbulence.
2. Yield‑Focused Strategy – Investors seeking regular income may view Exxon’s dividend growth as a solid feature, especially when paired with the company’s global footprint.
3. Risk of Regulator and Climate‑Policy Pressure – While past performance has been solid, the increasing focus on climate change may introduce long‑term risks that are difficult to quantify.

The article advises readers to view XOM as part of a broader asset‑allocation strategy rather than a standalone “safe haven.” It encourages investors to monitor not only price movements but also fundamentals such as production volumes, cost structure, and regulatory developments.

7. Sources and Further Reading

The Motley Fool article cites several data points from the SEC, Bloomberg, and Exxon’s annual reports. For those wishing to dig deeper, the article provides links to:

• Exxon’s Investor Relations site for quarterly earnings releases.
• Bloomberg’s energy‑sector performance dashboards.
• The U.S. Treasury’s data on corporate dividend payments.

The original article can be accessed via the Motley Fool’s website at the provided URL: https://www.fool.com/investing/2025/12/11/what-has-xom-stock-done-for-investors/.

Conclusion

Overall, the Motley Fool article delivers a comprehensive, data‑rich review of how Exxon Mobil’s stock has performed over recent years and what that means for portfolio construction. By blending price returns, dividend contributions, volatility measures, and risk‑adjusted analysis, the piece equips readers with a nuanced view of XOM’s value proposition—both as a yield generator and a risk‑moderating asset. Investors are encouraged to consider Exxon as one component in a diversified mix, mindful of the potential upside from stable dividends and the downside from commodity‑price swings and evolving climate policies.